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Domestic Economy

$106m in Loans for Airlines as Covid Bailout

All Iranian airlines except for four that have yet to complete their loan reception process have taken out a total of 25,440 billion rials ($106 million) in government loans under Covid-19 relief assistance, Mehr News Agency reported citing Minister of Roads and Urban Development Mohammad Eslami as saying. 

According to Maqsoud Asadi-Samani, the secretary of the Association of Iranian Airlines, Iranian airlines are estimated to have suffered an aggregate of 40 trillion rials (over $166 million) in lost revenues since the outbreak of Covid-19 pandemic to April 19, 2020. 

Since then monthly losses worth 10 billion rials (over $41,600) have been inflicted on them due to flight cancellations, he said.  

Latest data published by Iran Airports Company show Iranian airports' domestic passenger traffic during the first eleven months of last Iranian fiscal year (Mar. 22-Feb 19, 2020) declined by 41% year-on-year to 22.75 million. 

The data also indicate a 32% decline in domestic flights, compared with the same period of the last year. 

Over 182,243 tons of cargos were handled during the eleven months under review, which show a 38% drop compared with the corresponding period of last year.

The IAC report also shows that airports in Iran handled 254,710 landings and takeoffs in in eleven-month period, posting a 22% YOY fall.

Tehran's Mehrabad International Airport accounted for 8.36 million of the passenger traffic, 39% lower than the same period of last year. 

Mashhad International Airport and Kish International Airport came next with 2.67 million and 2 million passengers, respectively. 

Mehrabad handled 91,764 landings and takeoffs during the period, considerably higher than other Iranian airports. Mashhad International Airport came after with 24,479 landings and takeoffs.  

IAC's data do not include figures on Tehran's Imam Khomeini International Airport, which accounts for the largest portion of international flights operated to/from Iran. 

Kish Island-Tehran was the busiest air route in Iran during the month to February 19. 

As per the figures, airlines operated 669 flights from Kish Island to Tehran during the month to February 19, transferring 72,053 passengers from the island to the capital city. During the same month, 69,336 passengers were transferred from Tehran to Kish Island by 669 direct flights to put the route at the top of most congested air routes during the eleventh month of the year.

Tehran-Mashhad flights ranked second in terms of highest number of monthly flights, followed by Tehran-Ahvaz and Tehran-Shiraz. 

As per the figures, close to 2.35 million passengers were transported domestically during the eleventh month of the current fiscal year (Jan. 20-Feb. 19, 2021), indicating a 38% year-on-year drop. 

Mehrabad International Airport topped the list of Iranian airports in terms of domestic flights during the one-month period. The airport handled 34.24% of landings and takeoffs. 

Landings and takeoffs collectively decreased by 9% to 28,298 during the eleventh month of the year. Cargo transportation also experienced a 21% decline to 20,870 tons, IAC’s data show. 

The numbers, however, show signs of hope for the industry, when it is compared with the month before. Airports in Iran hosted 2.351 million passengers in domestic flights during the eleventh months of the year, which is 12% higher than the month before. Landings and takeoffs also increase by 8% and 10% respectively.

The report also includes data on the cancellation of Iranian airliners' flights. As per the report, 38% of Iranian airliners' planned flights were canceled during the month under the review. The cancellation rate was 45% during the previous month. 

Mahan Air topped the list, with a cancelation rate of 59% during the month under review. It was followed by Taban Airlines, with 52%; ATA Airlines with 42% and Sepehran Airlines with 39%. 

Meraj Airlines, Kish Air and Iran Air recorded the best performance in this regard, as their cancellation rate stood at 23%, 28% and 31%, respectively.

Air travel and tourism have been the hardest-hit industries in the early days of the Covid-19 pandemic. 

As the impact of the coronavirus and multiple government travel restrictions sweep throughout the world, many airlines have already been driven into technical bankruptcy, or are at least substantially in breach of debt covenants.

Iranian aviation officials believe that the sector needs at least three years to make a comeback.

The decline in global demand for air travels have also made a negative impact on Iranian airports' revenues. Revenues from air passenger traffic and aircraft flying over Iran’s airspace have decreased by 80% since the coronavirus outbreak, says Siavash Amirmokri, managing director of Iran Airports Company.